Thursday, 19 December 2013

Many
years ago when I had just returned to Turkey to work in the financial sector a
very senior Turkish bureaucrat gave me valuable advice about how to operate in
that country.

“I
know very well that the rules and regulations in this country are antiquated,
contradictory, and often obscure. It seems simple to take advantage of this
confusion and make a great deal of money through, shall we say, ‘irregular’
channels. My advice? Avoid this temptation at all costs. Do everything in your
power to stay inside the rules. One
thing we (Turkish officials) are good at is finding out about the little games
people play to get very rich. Whether or not we do anything about it depends entirely upon circumstances at the
time. But trust me, if you ever cross anyone in power, displease them in any
way, they will pull out your file and make your life miserable as they reveal
all your activities.”

In
other words, “You can get away with anything you want. But do understand that
someone, somewhere knows exactly what you are doing. And when it suits them
they will lower the boom right on top of your head.” I have seen this happen
time and again in Turkey.

This
admonition came to mind when I read about the latest corruption scandal to rock
Turkey. In an operation that seemingly was a surprise to the prime minister –
who notoriously hates surprises of any kind -- police officials arrested a
number of people close to the government, including the sons of three cabinet
ministers, on corruption charges. When searching the home of the general
manager of a state bank officials found shoe boxes filled with $4.5 million. The
allegations are continuing to spread and now involve the Minister for European
Affairs.

Rumours
of corruption in high places have been circulating in Turkey for years. But up
to now it was in no one’s interest or ability to do anything about it. Word of
pay-offs to get projects completed would be greeted with a shrug of the
shoulder. “What’s new? This is just the price of doing business.”

Suddenly,
out of the blue, someone has decided the time has come to lower the boom. Turkey
is no blushing virgin in matters of corruption, and this is not the first time
people close to the government have been have been caught lining their own
pockets. But why did this come out right now? What brought these claims to
surface now in such a dramatic fashion? Who are they really aimed at? Who is
behind them? How could this investigation have been going on for a year without
anyone in the government realizing what was happening?The Minister of the
Interior apparently learned about his son’s arrest on television. And this man
is in charge of the police?! Either he is completely incompetent or strong
forces outside the government’s control are at work here.

Needless
to say the country is filled with rumours of great conspiracies involving the
usual suspects of Israel and the United States. Also coming into the spot light
is the reclusive Islamic scholar Fetullah Gülen whose followers allegedly
control much of the police and judiciary. Gülen was one of Prime Minister Erdoğan’s
early supporters. But the two fell out when Erdoğan moved to close the private
college preparatory schools, many of which were run by Gülen’s people. Gülen
has adamantly denied any involvement in the latest investigation. But those
denials do not find many believers in Turkey.

The
government’s first response to this investigation was straight from the pages
of George Orwell. They fired about 30 senior police officials, including the
police chief of Istanbul, involved in the investigation. “How dare you do your
job?!!” This is the same police chief who earned Erdogan's high praise for cracking down hard on the protesters around Gezi Park last spring. No one has said a word about the substance of the investigation. There
was not even a ritual statement about the evils of corruption. No, all they
could do was claim that the investigation was somehow ‘dirty’, the result of a
plot to undermine the government.

An
added twist is the involvement of a shadowy Iranian Turk who was allegedly
involved in the illegal, sanctions-busting gold trade with Iran. According to
initial allegations he was also directly involved in bribing certain Turkish
ministers for several items like building permissions and help with getting
passports and visas for relatives.

The
only thing that is clear right now is that this investigation could not come at
a worse time for Prime Minister Erdoğan. He faces three key elections –
municipal, presidential, and general – in the next 18 months. While he could
shrug off massive protests last spring from the urban, liberal segment of
Turkey, he may have more trouble with this one. His party came to power
claiming to bring a new, clean style of governing to Turkey. As these
corruption revelations continue to dominate headlines even his strong
supporters could begin to rebel at the seeming hypocrisy of those claims.

For
the first time since he came roaring to power more than 10 years ago the prime
minister seems to be on his back foot. Where does he draw the line on support
for some of his closest allies, many of whom have become very rich? Can he
escape the fall-out from the steady revelations of corruption in high places?
Can he continue to claim the ethical high ground?

Meanwhile
the press and social media in Turkey are consumed with speculation about this investigation.
Pictures of cash counting machines and millions of dollars hidden in shoe boxes
in the suspects’ apartments dominate the front pages. There are claims that
four ministers are about to resign or get fired. Who will be next? And then
there is the billion-dollar question. Who is behind this drama?

Monday, 18 November 2013

What
on earth is going on in Turkey these days? At a time when the country has
serious economic, foreign and domestic policy problems the government seems to
be focusing on minor issues that threaten to unravel the aura of progress and
omnipotence created by the ruling Justice and Development Party (AKP) over the
last 10 years.

Vindictive
reprisals continue against anyone accused of being associated with the Gezi
Park protests last spring. Students suspected of involvement have been thrown
out of university dormitories. Others have had their state grants revoked. The
list of journalists fired by easily intimidated media bosses continues to grow.
Companies that are accused of not toeing the government’s line are threatened
with massive tax inspections.

Businessmen
I have spoken with are convinced their telephones, emails and faxes are tapped.
One business leader said his employees do not use mobile phones or faxes.
“We’ll talk when I am in London next month,” was his response to a question.
Such is the paranoia among business leaders outside the charmed government
circle that when you do get an interview you are likely to be asked to remove
the battery from your mobile phone. “They can listen to anything you know.”
George Orwell where are you?

Prime Minister Tayyip Erdogan

Prime
Minister Tayyip Erdoğan has now carried his vendetta against university
students to new levels in decreeing that co-ed dormitories or even private
apartments will no longer be allowed. The ensuing uproar among his fellow
countrymen living in the 21st century did not faze the prime
minister. He may well have calculated that any uproar in that segment of
society will only strengthen his base before the upcoming municipal elections.

But
in a bizarre move that threatens to break open the long-festering dispute within
the ruling party the prime minister recently moved to close the so-called dershanes, private cram courses to
prepare students for the critical university entrance exam. The move ostensibly
was aimed at levelling the playing field for university applicants by removing
the advantage of wealthy children who can afford the courses.

The
problem for Erdoğan, and indeed for his entire party, is that the move directly
challenges one of his major supporters, the shadowy but powerful Islamic
scholar Fetullah Gülen who established many of the dershanes. From his farm in the United States, where he fled from
legal action in Turkey many years ago, Gülen controls a vast ‘movement’ of
supporters in Turkey and other countries.

Fetullah Gulen

Gülen
says he symbolizes the ‘soft’ power of Islam and devotes his efforts to
sponsoring schools and health care facilities around the world. The dershanes are a key part of his program
in Turkey. In addition to providing the required exam tutoring many people in
Turkey say Gülen also uses the school to recruit members for his ‘movement’.

Gülen
and Erdoğan, who hates any competing
power base, have never been close. But as long as Erdoğan was working for
increased religious influence in the Turkish government Gülen lent his support.
But now that Gülen’s movement has gained power within Turkey through strong
positions in the judiciary and police it can more easily oppose Erdoğan.

Where
Erdoğan was strident, harsh and unrepentant Gülen would appear to be softer,
more conciliatory. During the Gezi Park protests last spring when Erdoğan was
relying on tear gas and police batons Gülen would issue impenetrable statements
seeming to urge – as far as anyone could understand them in Turkish or English
– dialogue and conciliation. Gülen, whose supporters have been accused of driving
the so-called Ergenekon case against
alleged coup plotters, has recently urged that the elderly plotters should be
released from their long prison sentences. Divisions between President Abdullah
Gül, Deputy Prime Minister Bülent Arınç and Erdoğan surfaced during the
demonstrations with Gül and Arınç urging more tolerance. Since then Gül has
missed no opportunity to distance himself from Erdoğan’s increasingly divisive
policies.

Which way will President Gul move?

Now,
with the policy on the dershanes, Erdoğan
is forcing an open break with the Gülen movement. Gülen has used the newspaper Zaman, to condemn the
move against the dershanes and to
urge his supporters to remain strong the face of opposition.

It
is difficult to see a clear winner in this contest between two camps within the
religiously oriented AKP. Ministers assumed close to the Gülen movement are
dropping broad hints that Erdoğan has only a short time left in active politics
and that the jockeying for power has begun within the post-Erdoğan AKP. President
Abdullah Gül has been particularly coy about his plans. Will he run for
president again? Or will be step down and become Turkey’s next prime minister? At
moment he is the most popular politician in Turkey. He will calculate his next
step very carefully indeed.

In
theory, internal party rules ban Erdoğan and 72 other AKP members of
parliament, from running again. This apparently leaves Erdoğan no choice but to
run for the non-partisan presidency. While no one doubts that he could change
the party rules in a minute, Erdoğan has often said he will do no such thing.

The
rub for Erdoğan is that currently the presidency is largely a ceremonial post
with no real power. He is trying desperately to change that and create an
executive presidency along French lines. But is by no means clear that he has the
required support in parliament for the constitutional change required for a
change in the nature of the presidency. Again, certain ministers close to the Gülen
movement are dropping hints that the issue is off the table. President Gül, for
one, has publicly stated his opposition.

Are
we witnessing the frantic actions of someone facing the end of his absolute
control? Or are these manoeuvres aimed merely at solidifying his base to repel
all challengers? It is too early to tell for sure. But meanwhile, serious
issues for Turkey continue to mount. And time is one luxury the country
certainly does not have.

Sunday, 20 October 2013

The
Tea Party in the United States has accomplished an extremely difficult task. It
has made politicians in Greece look positively statesmanlike. Whatever bumbling
and fumbling we have seen in Athens over the last several years has now been more
than equalled in Washington.

My
foreign friends shake their heads is dismay, confusion and anger about what
they have been seeing. What is this thing called the Tea Party? How can this group bring the world’s one remaining
super-power to the brink of implosion? They watch in amazement as the fanatics
in the Tea Party accomplish what no foreign power or terrorists have been able to do – create the impression of an incompetent
giant as much of a threat to itself as anyone else in the world.

The
best response I can come up with is that much of this nonsense is pure theatre
– nothing else. Not very good theatre, but still theatre.There is very little chance that the leading actors of this
far-right fantasy will ever get their hands on the levers of real power or
change the direction of the American government. The government is already so
big with so much inertia and so many vested interests in the status quo -- from
retired people, to local governments that desperately need federal assistance,
to farmers, to the military/industrial complex, etc, etc. -- that serious, fundamental change is almost
impossible. Maybe you can tinker at the margins, but that’s about all.

The Master Of Political Theatre

No
less than Republican stalwarts like Ronald Reagan and George Bush came to power
claiming they would reverse the spread of ‘big’ government. They soon gave up that
quixotic effort. Just consider two major budget items, Social Security and
Medicare. Every conservative worthy of the name has railed against these two
programs and promised to ‘cut them down to size.’ Never happens. They soon
learn that threatening to touch these two is like touching the third rail in a
metro system – instant political death. And efforts to cut other government
hand-outs are instantly met with loud squeals of protest that can easily
transform into votes against the offending politician. Much easier not to rock
the boat too much.

The
Tea Party act may play well locally, but it weakens dramatically in state-wide
contests, and disappears from sight in national elections. The Tea Party is
such an appealing target in national elections that if it didn’t exist,
President Obama would have to create it. It is the perfect foil for the
Democrats, the perfect bogeyman that allows them to scare enough normal people
to vote Democratic to keep their benefits. We will probably find out in a few
years that the Tea Party poster child Sen. Ted Cruz of Texas is actually on the
White House payroll.

Sen. Ted Cruz: Is He Secretly Working For The Democrats?

Just
consider the national demographics to realize the futility of the Tea Party
protests. The so-called Red States are indeed Red and likely to stay so.
Trouble is not many people live in those places, and they don’t really count in
national elections. If I were a Democratic strategist I would easily give you relatively
empty Wyoming, Montana, and Utah in return for the heavily populated Northeast,
California, Illinois and Michigan. The Democrats could probably nominate Darth Vader for president in 2016 and
still win.

This
is not the first time this very bad play has run in the United States. Through
the relatively short history of the country from time to time some clever
politician, now aided by the very loud and pugnacious trolls on cable TV, taps
into an underlying streak of distrust, fear, and isolationism that runs
throughout parts of the US. Big government, big business, big anything, and
foreigners of all shapes and colours are blamed for what is wrong with the
country. If we get rid of the bums and
stick our heads in the sand everything will be all right and go back to the way
it was in 1955. The mythology underlying this trend is that the ‘Last
Honest Man’ lives anywhere outside corrupted urban areas in a permanent set
from the old TV show Leave It To Beaver.

The
ultimate cynicism, sell-out if you will, is that most of those Congressmen who rant
the loudest about the evils of Washington and other urban areas usually stay in
those cities when their political terms are finally over. The lists of
lobbyists and leaders of the ‘trade associations’ are filled with former
members of Congress who use their Rolodex to slide into multi-million dollar
jobs. Somehow the charms of Little House
On The Prairie fade in comparison to the seduction of the bright lights and
brighter bank accounts in Washington. Anyone who wants to rock this boat with
real political convictions is treated
like a charter member of Al Qaeda.

Just
consider the case of former Sen. Jim De Mint of South Carolina. Once a leading
light of the ‘We-hate-Washington’ Tea Party brigade he resigned his Senate seat
last year to become president of the conservative Heritage Foundation located
in, you guessed it, Washington. He claimed the move was to ‘expand’ the
conservative movement. Right. I don’t know about the expansion of the
conservative movement, but his financial situation certainly expanded with a
sharp pay increase.

For
a full explanation of the incestuous and seductive nature of Washington I
recommend Mark Leibovich’s recently published book This Town. It is an engaging tale of how Washington absorbs and
molds many who come there with fervent expectations and hopes to change the
‘Town.’ More often than not, it is the ‘Town’ that changes them.

Tuesday, 15 October 2013

The tones of Hail to Chief waft over the
crowd as President-elect Hillary Clinton takes the podium at her inauguration
in 2017.

First
of all my fellow Americans, I would like to thank Senator Ted Cruz of the great
state of Texas and Senator Mike Lee of the beautiful state of Utah for making
this historical moment possible. Without their unstinting efforts to create an
America where no middle aged white male is left behind in his country club we
would not be here.

Like
every newly-elected president I, too, would like to extend my hand in true
bipartisan spirit and invite all 20 surviving members of the Republican
congressional delegation to a small dinner at the White House. And, contrary to
their expectations, I will bake the
cookies served for dessert.

Now, onto my agenda. First, I think the
current Supreme Court works too hard – too many cases and not enough people to
share the load. Therefore, I propose increasing the number of justices from nine to 11. I will nominate two people with outstanding qualifications that the
Senate, with its Democratic majority of 85, should have no trouble confirming.
Former presidents Bill Clinton and Barrack Obama have graciously agreed to join
the Supreme Court and continue its stellar work of upholding the best of the
Constitution.

Practising Her Speech

Then,
to show that there are no hard feelings for those who hold sharply different
views than my own, I will nominate Rush Limbaugh as our new ambassador to Iran
and Glenn Beck as ambassador to the newly created nation of Antarctica. I am
sure that with their well demonstrated cultural sensitivity and deep interest
in other religions and life styles they will represent the best that America
has to offer. I want to assure both men that we will work diligently to correct
whatever infrastructure deficiencies like the lack of cable TV or the shortage of a decent golf
courses that these two outstanding countries may suffer from.

My
other foreign policy initiatives include a fast track toward citizenship for
all those rushing to America for a better life style. We will indeed deliver a chicken in every pot -- and a Democratic
party registration card -- to all those deserving souls. It is also time, my
fellow Americans, to end the decades-long embargo of Cuba. The possibilities
for trade in valuable items like cigars, rum, and American voting rights with
the attached Democratic Party registration cards are simply too valuable to
ignore much longer.

In
recognition of America’s pre-eminent position in the world I think it is only
fair that we allow the opportunity for other carefully qualified non-Americans
to participate in our great elections. Every pre-qualified non-American will
get one-half of a vote compared to a full vote for all red-blooded full
Americans. Of course, those qualifications will include the willingness and
ability to sign the aforementioned Democratic Party registration cards.

Now
we all know that one of the first jobs for any American president is to create
jobs. Therefore, I am proposing that former House Speaker John Boehner be
offered the job as under-gardener in the Rose Garden – the White House Rose
Garden. It is indeed tragic that his long service in the House was cut short by
the upset win of the gay lesbian rock star Total Tatoo. But I want to assure
Mr. Boehner this surprising loss will not mean that he has to leave Washington
or join the ranks of the unemployed. I am sure that his well known ability to
spread fertilizer will serve him well in his new job.

I
know you all want to help our great city of Detroit out of its financial problems.
I think we can relieve the pressure on cities like Detroit with a large-scale
population transfer of those citizens to the wide-open spaces of Utah, parts of
Texas, and Nebraska. I am sure that the good citizens of those states will
welcome their new neighbours with open arms instead of loaded arms. Vice President Michelle Obama will be working
tirelessly on this effort.

Now
you might wonder where the money to fund all these new, exciting programs will
come from. I think a surtax of about 50% of the profits of hedge funds – except
those who contributed more than $1 million to my campaign – will certainly help
plug that funding gap. If this doesn’t do the trick another, temporary of course, surtax of 80% on
incomes over $2 million should do the trick.

I
would also like to take this opportunity to assure my fellow Americans that
we have not sold Alaska
back to the Russians to pay our national debt. There were some preliminary discussions, but
these quickly fell apart when Russian President Putin demanded that former
governor Sarah Palin be included in the deal. I told him there was no way that
we could part with such a national treasure. We countered that we would throw in Idaho and a few counties in Texas instead of Sarah Palin. But he stuck to his demands, so no deal was done.

Again,
I must offer my thanks to the Tea Party for its great efforts on my behalf. Is
this a great country, or what?

Sunday, 6 October 2013

Have you ever been at a party where your suburban
neighbour is going on and on about his recent adventure trip to Nepal, the
Antarctic or the South American rain forests where he got to live among natives
who travel piranha filled rivers in flimsy wooden canoes? These monologues
are usually accompanied by a digital camera filled with photos of our intrepid traveller
gasping for air at 22,000 feet on some Nepalese mountain or wrapped in layers
of goose down setting out across the frozen wastes of Antarctica looking like
some snow-bound Michelin man.

Calling Room Service At 20,000 feet

During all this you sort of slink in the corner, made
to feel that your recent trip to Paris was little more than going to Walmart
for a new outdoor grill. Your neighbour’s hard-won souvenirs might include the
blackened, frost bitten toes or the permanently disrupted digestive system of a
real traveller. All you have to show
for your efforts might be an elegant new hand bag, a fashionable dress, and a
very satisfied, content digestive system. Your luggage might even include a
couple of bottles of delicious claret which, admittedly, might not have the
kick of your neighbour’s fermented yak milk. But it goes much better with boeuf bourguignon.

Do not get dismayed! The Old Continent still has much
to offer. You can enjoy splendid architecture, unparalleled museums, glorious
concerts and superb scenery and, this is
very important for travellers of a certain age, still enjoy the marvels of
indoor plumbing and comfortable beds. Not to mention food that you recognize.

It is easy to take a car on a train through the
Channel Tunnel and wind up in Calais in about half an hour. From there you can go on the excellent French motorway system to any part of the country or
onto surrounding countries. There’s an added bonus if you travel on Sundays
because, unlike the UK, very few trucks are allowed on continental motorways on
Sunday.

As we zipped comfortably through northern France on
beautifully made wide roads I was reminded of another road trip I took several
years ago from New Delhi to Udaipur. We were in a gaily coloured minibus with
an unnaturally serene driver and a hyperactive assistant. The assistant’s job
became clear when the driver attempted to overtake on this narrow two-lane road
filled with trucks, minibuses, and assorted sacred animals that brought all
traffic to a screeching halt to allow them to cross the road unharmed. There
was much less concern for the fate of humans. After overtaking in the face of a
solid wall of oncoming traffic the driver would attempt to pull in on the
correct side of the road. At this point the assistant would frantically wave
his arm out the window to open up a tiny space in the dense line of traffic for
us to enter seconds before the oncoming articulated lorry would reduce our
minibus to scrap metal.

Having made it safely to the Süd Tirol in Italy you
are confronted with the magnificent soaring crags of the Dolomites brilliantly illuminated in a rainbow of colours every evening as the sun sets.
You have the option of doing absolutely nothing other than sitting an enjoying
the scenery while being waited upon hand and foot. Or you can set off on one of
the hundreds of well-marked hiking trails. These trails are designed for all
levels of energy from the semi-ambulatory to serious rock climbers and mountain
bikers. We were walking along one intermediate trail when we came upon a group
of oddly smiling people running fast off
a cliff in full faith and hope that their paragliders worked. We watched them
circle around like giant hawks, but we never did see one actually land.

Sunset In The Dolomites

One of the really nice things about these Dolomite
walks is that you never have to walk very far to one of the good restaurants in
the mountains. You’ve made it this far and then reward yourself with a good
lunch and a bit of wine. Then the only question is whether to walk back down or
take the handy cable car. It’s not that hard a decision.

A short trip takes you to Verona where, in addition to
the inevitable visit to Juliet’s house with its much-photographed balcony, you
can enjoy an opera staged in the Roman arena. One advantage of an opera in a
large setting is the opportunity for enormous stage sets. In Rigoletto the sets of medieval
Mantua were much more realistic than anything in venues like Covent Garden in
London.

The Italians may have speed limits on the autostrada but if they exist no one
seems to pay a great deal of attention. On the way to a friend’s house in Ivrea
at the mouth of the Val d’Aosta we were doing about 80 mph – in the slow lane. Most
of the invasion routes into Italy over the centuries seem to have come down the
Val d’Aosta, and those armies left castles, fortresses, and roads scattered all
over the hills and towns of the area.

Roman Walls In Aosta

A very scenic trip up the valley, past the Courmayeur
ski area and through the 6.5 mile Mt. Blanc tunnel takes you back into France.
The toll for the tunnel is expensive, €41, but, given the alternative of going
over the Grand St. Bernard pass, it’s not unreasonable. After a while you enter
the gentle rolling hills of Burgundy where everyone was getting ready for the vendage.

A leisurely trip back across northern France after two
days sampling the many delights of Burgundy rounded out our trip through
Europe. Granted, there were no Amazonian piranhas, no frozen mountain peaks,
and very few suicidal lorry drivers to generate stories for the barbeque. But
despite those drawbacks we found that the Old Continent still has much to offer.

Tuesday, 27 August 2013

In searching for
people to blame for Turkey’s recent economic problems Prime Minister Tayyip
Erdoğan has lashed out at the so-called ‘interest rate’ lobby which, according
to him and his cronies, is nothing more than a shadowy group of domestic and
international financiers who want to derail the Turkish economy. The following
contribution to Levantine Musings is from a charter member of this group of
financiers – one of the many brilliant young Turkish analysts and fund managers
who work for major international financial institutions around the world. I
know many of them, and these are the very people that Turkish officials should
be proud of instead of mindlessly demonizing. Although the prime minister
will never admit it, Turkey desperately needs this ‘interest rate’ lobby to
finance the country’s yawning deficits. As this note implies the Turkey has
benefitted a great deal over the last decade from the huge amount of global
liquidity. As this condition ends the Turkish government is at risk of
confusing good luck with good policies.

**********

Even though no one knows what Turkish Prime Minister Erdoğan meant when
he talked about the “interest rate lobby”
during the protests surrounding Gezi Park in Istanbul, this ‘evil’ group of people
has become the number one enemy in Turkey, ahead of the International Monetary
Fund, Bashar Assad and General Al-Sissi in Egypt. Deputy Prime Minister Ali
Babacan, in charge of the Treasury, added to this mystery when he said “those
in the interest rate lobby know who they are”. After a lot of rakı (the Turkish national alcoholic
drink before the prime minister declared otherwise a few months ago) and
serious thought, I realized that I am actually part of this evil group, as I
have been making a living by investing in interest bearing instruments over the
last two decades, and the owner of this blog would call us “the basis
point people". Most probably, by being a “comprador bourgeoisie”, I must be the lowest of all, as I
sold out my great Turkish nation to this malicious group, in return for an (ever
diminishing) annual bonus and paying more than half of it to Her Majesty’s
Revenue & Customs.

First of all, let me try to explain how we operate. We are part of
a group called Emerging Markets Fixed Income investors. On average, we
meet with ten government and central bank officials, company CEOs/CFOs weekly
from a universe of about 50 countries and well over 600 companies, all of which
want to lure us to get financing at cheaper rates, so that they can provide
better services for their populations and better returns for their
shareholders. Our motto is very simple “give money to those who can pay
you back”. We are a very sensitive to interest rates, and our unit is
“basis point” which is 0.01%. Even if we have one basis points (0.01%)
higher return than our competitors, it would have a big impact on the size of
AUM (assets under management). Our investors are a greedy bunch as well;
they range from the sovereign wealth funds to retired teachers from Japan to
dentists in Brazil, who want to have higher returns for their savings so that
their quality of life is better. Anyone, who has ever dealt with the
Sovereign Wealth Funds of interest free economies of the Saudis and Kuwaitis
would tell you how sensitive they are to “basis point”, as they understandably
want their nations’ savings to have higher returns.

Now, about our relations with Turkey. Ever since the first the road
show that Abdüllah Gül (now president of
Turkey) and Babacan did before the November 2002 elections, we meet with
Turkish government ministers, Central Bank governors and Treasury officials on
a regular basis. (It is interesting to note that that first road show was
organized by Mehmet Şimşek who was an analyst at Merrill Lynch back then. He
has since moved up in the world and is now Turkey’s Minister of Finance.) Only
last year alone, we had the opportunity to meet with three different ministers
and at least five high level government officials. The reason for Turkish
officials’ interest in us is very simple: every single day Turkey has to find/borrow US$500 million to cover the short fall in its foreign currency
earnings - the infamous Current Account Deficit and refinancing existing debt. Turkey desperately needs
foreign cash, the cost of which depends on how well the government sells the
Turkish story enabling Turkey to earn dollars in the future.

Until very recently the ruling Justice and Development Party (AKP) government had done a good job. From the very
first day that AKP was leading the opinion polls and Mr. Gül told us the story
of “Conservative Democracy” in 2002, we invested in Turkey and we made good
returns, even though interest rates fell from 100% to 6%. (Yes, actually,
interest rate lobby makes money from falling interest rates). The day
Turkey was upgraded to Investment Grade by Moody’s earlier this year, we heard
from Minister Şimşek about Turkey’s ambitions of being better in technology
than Germany, better in fashion than Italy. And we bought it. Before the
start of the Gezi protests, we had couple of billion US dollars invested in a
Turkish government bonds and corporate bonds - - which are unfortunately worth
much less than that amount at the moment.

But now, for the first time since 2002, we see a really bleak outlook for Turkey.So far the Turkish government has been
extremely lucky with the global economic situation. With global interest rates
at historic lows, it was not very difficult to attract cash into
Turkey. However, the rules of the game have changed profoundly. And,for me, the biggest sign of trouble is not the current account deficit, the unorthodox Central Bank policy or even the political mess Erdoğan put
himself into after his extreme reaction to the Gezi Park protests, but the fact that the government
officials are becoming extremely dependent on conspiracy theories and imaginary
enemies. When such thing happen you know it is the beginning of the end. The
only hope for Turkey now is smooth transition of leadership within the AKP,
with the hope of common sense prevailing, eventually.

Monday, 26 August 2013

The
difficult economic and political situation in Greece is well known by this
time. Perhaps if you lived on a mountain top in Nepal you could have avoided
the constant barrage of bad news about the country, but the rest of us are
confronted with the same story every day over our breakfast cereal. It seems that every time editors are faced
with the problem of what to put in tomorrow’s newspaper or on tonight’s news
show they can always rely on – or manufacture – yet another story about how
Greece must leave the Euro or how unsustainable (editors love this word)
the debt burden has become. No wonder those few people who still read
newspapers prefer to start with the sports pages and comics.

There's much more to Greece than this

Having
spent the better part of the last three months on an island in Greece I have to
take serious issue with the general view of Greece. The situation is indeed
serious, but far from hopeless. Buried in the avalanche of depressing news are
many examples of excellence, fortitude, and unrivalled beauty that should
attract many more people than it does.

The
stories about Greece have understandably focused on the completely
dysfunctional public sector with its kleptomaniac so-called public servants. A
friend of ours was recently given what has to be the most difficult – if not
impossible – job in Greece: Minister for Administrative Reform. Such reform is
definitely required, but extremely difficult in an environment where people
confuse the need for administrative reform
with the hated austerity that has
caused real incomes to drop. Reform is even more difficult in Greece because it
is the only country I can think of where the so-called political Left is
fighting tooth and nail to preserve the status quo – a status quo that has
driven the country to bankruptcy. Karl Marx must be turning over in his grave.

However,
if one looks beneath the drastic headlines there are a few signs that things
are beginning to pick up. If one bothered to look, one would find a number of
companies that are doing quite well, thank you. These tend to be smaller
companies that are flexible and imaginative enough to find new export markets
and cope with a difficult financial situation where suppliers demand cash,
insurers increase premiums because of the ‘Greek risk’, and normal working
capital loans are scarce or non-existent.

The
important tourism sector is showing signs of life as receipts were up more than
15% for the first five months of the year. Officials expect the number of
tourists to increase from 16 million in 2012 to 17 million this year. Prices,
especially compared to Turkey just across the Aegean, have certainly come down
sharply. An article in Turkey’s Hürriyet
newspaper on Sunday reported that a meal in a fish restaurant in a small Aegean
town starts at about $80 per person. A hamburger will set you back more than
$25. And these prices are without any wine or beer whose prices have
skyrocketed because of heavy taxes. Prices on the hot spot of Mykonos in Greece
may approach this level, but everywhere else we ate was far less expensive.
Hotels in central Athens have responded to the crisis by lowering prices and
seeing their occupancy rates increase.

Tourists
would find even lower prices if they were willing to go farther afield than the
usual destinations of Mykonos, Santorini and other locations noted primarily
for ear-splitting techno music. The beautiful Sporades islands of Skopelos,
Alonissos, or Trikera offer spectacular
scenery unlike any other island I have seen in Greece. Where the usual Aegean
island is fairly barren and often short of water, these islands are covered
with dense forests that march down to dramatic cliffs plunging into the sea. I
was reminded of the coast of Maine in my native New England with one major
exception. You can happily dive into the sea surrounding these islands without
suffering the threat of cardiac arrest from freezing water.

Alonissos at sunset

Dense forests . . . and the sea is warm

On
a more personal note we have just completed major renovation of my wife’s
160-year-old family home. I have never seen better work anywhere – not in the United States and not in Britain. The workers
showed up six days a week, on time, worked meticulously, and at the end of each
day cleaned up the mess of broken plaster they had removed from the underlying
solid stone structure. Old, broken mouldings were beautifully restored. All of
this was done with local labour from the island. The contractor told us two
years ago the work would take two months. He was only two weeks off because we
had to replace more plaster than anticipated, and it took time to dry before we
could paint. And the entire project was completed within the budget the
contractor set long before the job began. Meanwhile the town had finally
completed the job of placing utility cables underground, and we could do away
with the web of about 10 different cables that had been attached to the front
of the house.

By
no means do I wish to suggest that Greece has climbed out of its deep financial
hole or that it is happily on its way to functioning like a Scandinavian
country where most people pay taxes and bureaucrats actually serve the people
instead of the other way around. But there are unmistakable signs of change,
however small and fragile at the moment. Anyone willing to look beyond the
headlines will be pleasantly rewarded.

Friday, 9 August 2013

The long-awaited verdicts in the so-called Ergenekon
case against alleged coup plotters in Turkey have finally been handed down.
Those convicted of attempting to overthrow the elected government have been
given heavy sentences. According to theory Turkey is now free of the threat of
yet another military coup and can move happily to the sunny uplands of real
democracy. If only.

Zealous prosecutors quickly expanded what began with
the discovery of an arms cache in an Istanbul suburb more than five years ago into
a broad hunt for any and all potential plotters against the government. The search for plotters went into all realms
of Turkish life and quickly assumed the name Ergenekon – a valley in Central Asia where ancient Turks sought refuge
and were guided by the legendary grey wolf who became an important figure in
Turkish nationalist mythology. The hunt even went into the hitherto untouchable
realm of the army general staff. Indeed one of those sentenced to life
imprisonment is the former chief of the general staff.

The net gathered hundreds of suspects who were thrown
into jail long before any trial. During the process there were serious
questions about prosecutorial misconduct, tainted evidence, and gross
procedural errors. Given the tight veil of secrecy that shrouded much of the
proceedings the truth of those allegations may never come out until the lengthy
appeals process that most assuredly will wind up in a European court of appeals.

The initial effect of the verdicts has been to deepen
the already deep social and political divisions in Turkey. Those protesting the
verdicts are convinced they are nothing more than vicious revenge and pay back
by Turkey’s Islamic-oriented government against the heavy-handed secular
pro-Ataturk military/bureaucratic elite that ran the country for decades. Do unto others what they did unto you.
Others, equally vociferous if seldom accurate, maintain the verdicts were a case
of simple justice – a message that what happened in Egypt will never again
happen in Turkey.

Both views miss the point. Even in the hard-to-accept
case that all the evidence was valid and the prosecutors didn’t trample over
the defendants’ rights nothing fundamental has changed in the relationship of
the people vs. The State – the almighty, the sacred Devlet. The only thing that has changed is who wields the Iron Fist. It is hard to say the country
has progressed very far along the road of democracy when an illiberal,
authoritarian, paranoid military-backed regime is replaced by an illiberal,
authoritarian, paranoid Islamic-oriented government that uses the ballot box as
effectively as the military uses tanks to silence opponents.

It is the height of irony to hear Prime Minister
Tayyip Erdoğan bellow about the alleged death of democracy in Egypt when he
himself is doing his very best to squash whatever seeds of real democracy are
trying to grow in Turkey. The louder he squawks the more obvious it becomes how
little he understands that real democracy involves empowering the individual against the state. Since the wide scale protests in
May he has done everything in his power to stifle individual expression and
dissent from his unique vision of the national
will. Protestors have been beaten and arrested. Those who beat up and even
murdered protestors have yet to be found. Police who fired tear gas and
chemical-laced water were praised for their ‘brave’ duty. Dozens of journalists
who dared to criticize the government’s over-reaction have been fired by owners
afraid of a government backlash on their other business interests. Social media
not under the government’s direct control have been heavily criticized.

Corporations deemed insufficiently pro-government have
been targeted for abusive tax investigations. Professional organizations who
dare to question the government’s plans are stripped of their official
consulting role. In an incredible example of cutting off your nose to spite
your face Erdoğan has ordered that all student loans should be cancelled for
anyone who participates or supports the demonstrations. Exactly who is going to
propel the Turkish economy upward if not these students who can no longer afford
to learn anything??

His nervousness about dissent in any form has also
descended to sport. The Beşiktaş football club now wants anyone who buys a
ticket to sign a pledge not to engage in or instigate any chanting that might
have political overtones. The government must be terrified of a repeat of the
scenes during the protests when football supporters from all the major clubs
joined the protestors.

The foolishness doesn’t stop there. The State’s
intrusion into private lives now includes all women. The prime minister
recently re-iterated his call that it is every woman’s duty to have three children.

The basic problem the prime minister has is that a
very large part of the young Turkish population is now well educated, well
travelled, and well aware of how real democracies operate. They are no longer
willing to sit idly and watch their rights trampled. In the long run they will succeed in adjusting the balance of
power between the individual and the State. The sooner the prime minister
accepts this fact the smoother the transition will be.

Sunday, 28 July 2013

During my many years in Turkey I have witnessed
countless instances of weird conspiracy theories, national paranoia, and
distrust of any and all foreigners. But an incident reported recently in The Daily Telegraph of London has to
take first prize.

Residents of a village in eastern Turkey thought that a kestrel – a fairly large bird of prey –
soaring back and forth over their village could be an Israeli spy. Apparently
they caught the bird and found that it was wearing a metal band stamped with
the words ‘24311 Tel Avivunia Israel.’
The dreaded word Israel was all it
took to drive the local spy-catchers into high gear.

The offending bird was frog-marched off to a local
hospital where it was promptly registered as an ‘Israeli spy.’ I am not making
this up. It was only after intensive medical examination – including X-rays –
that the bird was identified as, well, just a bird. There were no microchips or
other devices that might transmit vital information about an extremely barren
part of Turkey back to the hated Mossad. All in all, I suppose the bird was
lucky it wasn’t slapped into an orange jump suit complete with ear muffs and
shipped off to Guantanamo.

An Israeli Spy?

I was reminded of my own experience in another small
eastern Turkish town many years ago where I was working as a teacher. Because I
was foreign, because I spoke a little Turkish, and because I sometimes went to
the capital Ankara the locals were convinced I was a foreign agent. The only
question was who I was working for – the CIA, the Israeli Mossad, the Russian
KGB, or the British MI 6. Every denial on my part only reinforced their
conviction. “He would deny it,
wouldn’t he?” Finally, a fellow teacher put the issue to rest one evening in
the local coffee house. “What in the name of Allah,” he asked “is in this small
town that is worth spying on? How many goats you have, Ahmet? Where you hide
your tools, Orhan? Is America so rich that it can afford to send people to
every small town in the world to find out useless information?” The others had
to nod their heads in reluctant agreement, somewhat annoyed that their
evening’s entertainment had been taken away.

All of this would be merely humorous if it didn’t
reflect the attitude of senior members of the Turkish government today. Prime
Minister Tayyip Erdoğan and certain members of the cabinet have been acting
ever more erratically while ranting and raving about foreign and domestic
conspiracies ever since large scale protests broke out in May. First it was
the perfidious, and always useful, foreign
agents, who were stirring up trouble. Then it was agents from the
opposition political parties. When the stock market and the local currency
began to slide then the well known – to the prime minister at least – interest rate lobby – was hard at work
undermining the Turkish economy. One cabinet minister pulled out the always
useful Jewish conspiracy to explain
the economy’s problems. These activities are all part of the larger conspiracy,
you see, organized by people who want to slow down Turkey’s growth.

Since taking office more than 10 years ago the prime
minister has travelled the world. Unfortunately, he seems to have learned very
little on his travels. His guiding principles seem to be the same ones he
developed growing up in one of Istanbul’s notoriously tough neighbourhoods –
never take a back step, absolutely never apologize, intimidate your opponents
by yelling loudly and fiercely. Compromise is not a word he recognizes. He also
learned that you never lose votes in Turkey by blaming foreigners for the
country’s problems. There was the famous case after the devastating earthquake
in 1999 when the nationalist health minister refused to accept foreign blood
donations that could dilute ‘pure’ Turkish blood.

The prime minister was furious about an open letter recently published in The Times of London that
sharply criticized his violent words and crude police behaviour during recent protests. The letter was signed by luminaries including Sean Penn, Susan
Sarandon, Ben Kingsley, the historian David Starkey, and many others. A more
rational politician would have shrugged this off and accepted the criticism as
the price of being in office. Not Tayyip Erdoğan. He went off the handle
accusing dark forces for being behind the letter. Demonstrating his complete
ignorance of the concept of freedom of speech he threatened to sue the
newspaper. One hopes that cooler heads in Turkey can prevent him from making a
complete fool of himself on the international stage.

No one is exempt from the paranoia of the witch hunt
against anyone thought to be supporting the protests against him. Doctors,
teachers, foreign and domestic journalists, economists, leading Turkish
companies, and professional organizations have all been targeted as agents of
those who want to undermine Turkey. Even Turkey’s largest company, the Koç
Group is not exempt from his fury. Not only is prime minister annoyed at Koç University
but he is furious that the group’s Divan Hotel offered shelter to people
running away from police tear gas during the demonstrations. Therefore, it came as
no great surprise when the group’s refinery Tüpraş was subjected to a surprise
tax audit. Only fanatical Erdoğan supporters believe this is a coincidence. And
the prime minister wonders why very few people are rushing to invest in Turkey.

Is Turkey's Largest Refiner On The Lengthening 'Enemies' List

Can anyone within the ruling Justice and Development
Party (AKP) curb this brutal and damaging abuse of power? Can President
Abdüllah Gül curb the prime minister’s behaviour before it undoes everything
the AKP has accomplished? Or, more properly, does he want to curb this behaviour? When you take on Tayyip Erdogan you better be ready for a bare knuckle battle. The answer will go a long way to
determining Turkey’s near-term future.

Monday, 8 July 2013

Sometimes
you have to feel sorry for Turkish Prime Minister Tayyip Erdoğan. You really
do. He has had a horrible summer so far.

First,
many thousands of his own citizens rebelled for days against his own narrow,
very limited vision of democracy and his arrogant assumption that he and only
he knows what is best for that complex country of almost 80 million people.

Second,
and most alarming, his fellow Islamists in Egypt get booted out of power. Days
of mass anti-government rallies culminated in the army removing the Moslem
Brotherhood government and attempting to install a more professional cadre.

Not everyone voted for the Egyptian president

Erdoğan’s
indignation kicked into high gear as he railed against this ‘shocking’ anti-democratic move. He and
his henchmen predictably blasted Western nations for not reacting for more
forcefully against the coup. To Erdoğan’s people, the Egyptian coup was nothing
more than the work of ‘anti-democratic’ forces around the world. They
conveniently ignore that there was nothing remotely democratic about the short
rule of the Moslem Brotherhood in Egypt. In addition to being administratively
incompetent the Brotherhood froze all other elements of Egyptian society out of
the governing process. In short, they made it easy for their opponents to drive
them from power and forcefully deliver the message that real democracy only begins
at the ballot box. The most glaring example of this abuse of ballot box power was Adolf Hitler who was, after all, elected. It didn't take him long, however, to destroy the democracy that brought him to power.

Erdoğan
even went so far as to claim that the Moslem Brotherhood government had been
undermined by an economic boycott during its short time in power. I have no
idea where this groundless claim came from, but once again it shows his
complete disregard for any facts. But, as his reactions to the unrest in Turkey
show, he will simply make up facts to suit his thundering arguments. When all
else fails he and his sycophants can always fall back on the tried and true ‘Jewish, international, financial conspiracy’
theory to explain problems in Turkey and Egypt.

So
far he has remained tactfully silent about the support that Saudi Arabia and
Qatar have shown for the Egyptian army’s move. We shall also forget for the
moment Turkey’s own support for that notorious despot Omar al-Bashir of Sudan
(subject of an international arrest warrant for genocide in Darfur) or that
Erdoğan himself was the honoured recipient of the Gaddafi International Prize
for Human Rights just before that dictator was driven from power.

The
backdrop to Erdoğan’s unhappiness about the Egyptian situation is, of course,
Turkey’s own history of military intervention. He is all too familiar with the military
justifying its actions by saying it was protecting the secular character of
Turkey’s government against inroads by radical Islamists. His answer to this
risk was to lock up several leading military figures and throw the key away. As
usual he misses the fact that his own democratic credentials were severely
dented by jailing hundreds of his opponents for years without the benefit of a
trial – which might, after all, show that the charges were false or fabricated in
the first place.

No longer a real threat in Turkey

Erdoğan’s
erratic and increasingly shrill behaviour just might reflect the looming domestic
threats to his own legacy and the collapse of his grand vision of Turkey’s role
in the Middle East.

His ruling Justice and Development Party (AKP)
prides itself on Turkey’s rapid economic development during their rule. Up to a
point that’s true. But as more and more economists are noting, the wildly touted growth numbers don’t stand up to rigorous analysis. They are good, but
not great. Much has been said about the relatively low level of government
debt. Again, true as far as it goes. But the government spokesmen never mention
the explosion in private sector foreign debt. But most of all, Turkey’s
economic performance rests largely on the ephemeral confidence of international
investors who provide the $200 billion external financing that the country
needs every year. And nothing removes
that confidence faster than political unrest coupled with the merest hint of
monetary tightening by major central banks. International investors are
getting restless and starting to question the wisdom of their Turkish
investments. The stock market is down more than 20% since the end of May. The
currency has depreciated more than 10% since the beginning of the year and is
approaching the once-unthinkable level of 2:1 against the US dollar. As far as
the AKP is concerned a weakening economy is far more dangerous to the party’s
future than the almost non-existent threat of military intervention à la Egypt.

Not
too long ago Turkey’s smug foreign minister Ahmet Davutoğlu was crowing about a
resurgent Turkey’s key role in the Middle East as a balance to the
deteriorating relations with the European Union. Now Turkey has to look long
and hard to find a Middle East ally beyond, of course, Hamas in Gaza. The new
rulers of Egypt will hardly appreciate Turkey’s loud support for the deposed
Moslem Brotherhood. Wealthy countries like Saudi Arabia and Qatar will continue
to support the coup in Egypt regardless of Turkey’s objections. And who can
predict how Syria will turn out. Turkey has gambled heavily on the fall of
Basher al-Assad who, so far against all odds has avoided the fate of Gaddafi or
Mohammed Morsi.

Turkey
faces a critical period over the next several months with delicate Kurdish
negotiations, possible changes to the constitution, juggling the economy, and
meeting the demands of its own people for real democracy and inclusion. Has the prime minister learned anything from the unrest in his own country as well as Egypt? Will he be able to meet these challenges with something more than his usual bombast and conspiracy theories?

Friday, 21 June 2013

Not very long ago the future of Turkey seemed assured.
The country was widely praised for its seemingly strong economy and stable,
‘moderately Islamic’, politics. After a month of nation-wide protests,
excessive police reaction, and continued vehemence from the prime minister the
country’s future no longer seems so assured.
The social fabric has been badly split, cracks have appeared in the
broad coalition of the ruling Justice and Development Party (AKP) coalition, the long-term well-known (by all except the
prime minister) vulnerabilities of the economy have become even more apparent,
and the vision of Turkey in the European Union is fading fast.

What happens now? Where does the country go from here?
There are several issues, but four come to mind immediately.

1.The Opposition: The opposition political parties have been handed a huge gift. But, as
usual, they have no idea what to do with it. A simple statement along the lines
that they offer ‘real’ democracy compared to the ‘so-called’ democracy of Prime
Minister Tayyip Erdoğan, that they respect all
the different, complex religious and ethnic factions in Turkey, that they will
in fact listen to people would go a
long way to making the opposition credible. Unfortunately, none of this seems
to be happening.

2.The AKP: Here the situation is more complex. The AKP is a very
broad coalition of true believers in Tayyip Erdoğan, more pragmatic members
from former conservative political parties, technocrats, and devout Moslems who
resented the heavy-handed secular Kemalist bureaucracy of previous decades. Now
a gap is opening between the person of Tayyip Erdoğan and the party as a whole. Erdogan enjoys wide support, but there is some question about howdeep this support is.There are signs that the pragmatists are getting nervous that the prime
minister’s incoherent rants and repression will cost the AKP dearly.

Prime Minister Tayyip Erdogan In A Familiar Angry Speech

The party risks
losing everything it has struggled to gain in the last 10 years. President
Abdüllah Gül has expressed this very fear. In his statement “You are risking
our gains of 10 years” it was unclear – perhaps on purpose – whether the ‘you’
in that sentence was directed at the protesters or the prime minister. Deputy
Prime Minister Bülent Arınç is rumoured to have stormed out of a cabinet
meeting after being criticized by Erdoğan for his criticism of the police over
reaction. A loyal AKP business owner in central Turkey sent buses filled with
his employees to the recent pro-Erdoğan rallies. But he expressed total disgust
with the prime minister and was quoted as saying “We will never make him
president. He is ruining us.” Even the AKP mayor of Istanbul is backtracking quickly. He now says
the people will be consulted over everything from bus stops to park development.

President Abdullah Gul Plays His Hand Carefully

All major
political players in the AKP and elsewhere are playing a long game with their
eyes on the 2014 elections and developments about the presidency. Everything
they say now is nuanced and influenced by their plans for those elections.
Erdoğan desperately wants a constitutional change giving the president strong
executive powers. It now looks doubtful that such changes will get through
parliament. In that case if he still wants the presidency will he be satisfied
with the largely ceremonial role? If there is a popular vote for president
could he even be elected? A recent poll showed that President Gül is by far the
most popular politician in the country. Erdoğan is seen as divisive. Gül is
playing his cards very carefully and not saying just what he wants when his
term is over – another term as president or perhaps moving to the more powerful
position of prime minister.For the time
being he seems content to play the ‘Good Cop’ to Erdoğan’s ‘Bad Cop.’

3.The Economy: This is Erdoğan’s real Achilles Heel. He continues to
rant and rave about ‘foreign plots’ and the so-called ‘interest rate lobby’
working to undermine Turkey’s economy. But the real vulnerability is the very
structure of the Turkish economy. It depends entirely on $200 billion per year of foreign investment – and
most of this is short term so-called hot money. Since the Federal Reserve
indicated a possible end to the quantitative easing program all markets,
especially emerging markets, have been hard hit. The Istanbul Stock Exchange
dropped more than 18% in the last month, yields on Turkish bonds have increased
sharply, and the currency has dropped to an all-time low against the U.S.
dollar. It is true that
Turkey has been harder hit than most emerging markets, but that has nothing to
do with his ridiculous conspiracy theories. These developments have led one
anti-AKP economist to predict that ‘They will go as they came” – i.e. on the
back of falling economy.

4.Witch Hunt: The worst part of the prime minister’s furious,
vengeful reaction to the protesters is the witch hunt against any who oppose
him. University rectors were told to identify any faculty members who joined
the protests or encouraged their students to do so. The Koç group, owners of
the Divan Hotel, were threatened because protesters sought refuge in the hotel.
Bank executives who supported the protests were lectured. State controlled
companies withdrew their deposits. Other executives who failed to support Erdoğan
suddenly found tax officials on their door step. Even the imam of a mosque was
arrested when he failed to back up the prime minister’s outrageous lie that
protesters entered the mosque with beer cans. Even after he learned the truth
Erdoğan continued to repeat this lie.

It is not yet clear how Turkey will emerge from this
turbulence. But what is clear is that the protests that began in small Gezi
Park are having a profound, long lasting political, economic, and social
impact. It remains to be seen whether Tayyip Erdoğan has the ability to learn
anything, or whether he will merely become a footnote in Turkish history.

Followers

About Me

I worked as a fund manager and investment banker in Turkey and the Middle East for 25 years. Over the years I have travelled extensively throughout the region and have met many of the leading government officials, business and cultural leaders. I am married to a Greek and now divide my time between London, Turkey, and an island in the Aegean.